Developers on hold as LRT dispute plays out

Developer Donald Kasbohm is waiting to develop a multifamily housing project on the site of the former McGarvey Coffee building at 5725 Highway 7 in St. Louis Park until the Southwest Light Rail Transit line route is finalized. (Staff photo: Bill Klotz)

With debate over the Southwest Light Rail Transit line poised to heat up again, developer Donald Kasbohm has a simple request. Make a decision already.

“We’re spinning our wheels waiting,” said Kasbohm, who wants to develop multifamily housing on the site of the former McGarvey Coffee building at 5725 Highway 7 in St. Louis Park. “I think a lot of developers would begin projects if they had some surety.”

His proposed 103-unit development is less than a half-mile from a proposed LRT stop. But nothing can go forward until planners resolve Southwest LRT design issues.

A new study probably isn’t helping developers feel any more confident about starting projects near the proposed line.

The study, released in draft form Thursday by the Metropolitan Council, addressed options for an existing freight rail line in the path of the proposed light rail project. It found that leaving freight traffic where it is now in Minneapolis’ Kenilworth Corridor, and co-locating LRT, would be viable. The study also found that a reroute of freight traffic through St. Louis Park would work.

Neither option is new — a possible reroute through St. Louis Park has been discussed for the past several years. And Southwest LRT project staff previously recommended that freight trains stay in Kenilworth, with light rail joining the corridor via a series of shallow tunnels. The Metropolitan Council was set to approve a project with such a design in October, but council chair Susan Haigh announced the vote would be delayed to further study the issue, at the request of Gov. Mark Dayton.

Another developer with experience near a light rail line said waiting on projects is the best option for would-be players along the Southwest corridor.

“Because these [rail] projects are so big and so expensive, and funding mechanisms are so reliant on federal money, just by definition you have to be patient,” said Minneapolis developer Norm Bjornnes, whose Oaks Properties LLC built the 104-unit Oaks Station Place Apartments on the Blue Line in 2012. “Until they’re actually laying rail, I would just wait.”

Bjornnes said his focus right now as a developer would be on the Blue Line and the Green Line, which is set to open June 14 and the Met Council says has already attracted more than $1.7 billion in private development nearby.

“I’d rather just buy a site that’s ready to go,” he said.

Haigh said Thursday she hopes the council is ready to decide on the freight issue and move forward with the light rail project by the end of March. She also hopes to have the support of all the communities along the line, each of which could hold up the project by withholding municipal consent.

However, the cities of Minneapolis and St. Louis Park have been locked in a disagreement over where freight traffic should go. Minneapolis officials have said if LRT comes through the Kenilworth Corridor, freight needs to move. Mayor Betsy Hodges praised the new study from the Met Council, saying in a statement that “there seems to be a viable relocation option on the table.”

Meanwhile, St. Louis Park leaders have been opposed to previous reroute plans. In response to the latest study, mayor Jeff Jacobs said in a statement that the city was “extremely discouraged, disappointed, and quite frankly shocked that at the 11th hour a so-called viable freight rail reroute through St. Louis Park has now been identified.”

For Bjornnes, this back-and-forth should tell a developer to wait things out.

“Patience is a virtue developing along a light rail line,” he said. “(But) the end product is excellent.”

Kasbohm, meanwhile, said the earliest he could see a project breaking ground at the site is this April, which is about a year behind his original schedule. And even that doesn’t seem likely at this point.